Accountancy
A maintaining and auditing records and preparing and analyzing financial reports for an individual or business entity, as well as communicating financial reporting information to present and potential equity investors, creditors, managers, tax authorities and other users to help them make resource allocation decision.

Accounting
The process of recognition, measurement, presentation, disclosure and communication of financial information about an entity that is useful in making decisions.

Accounting profit
Win or loss without taxes.

Accounts receivable
Amounts due from customers for goods or services provided in the normal course of business operations. A current asset resulting from selling goods or services on credit.

Acquisition related costs
Costs incurred by an acquirer to enter into a business combination. These are expenses recognized when incurred in profit or loss.

ADRRAverage daily room rate.

Advance payment
A payment made or received before a product is delivered or a service is provided.

Advisory council
A group of individuals which provides expert information to management, the board of management or owners. The information could be related to various subjects, including marketing, financing, or expansion of the business.

Annuity
Series of equal periodic payments or receipts. Examples of an annuity are semiannual interest receipts from a bond investment and cash dividends from a preferred stock.

Applicable tax rate
Tax rate applied to taxable income to determine the amount of tax due.

Architect The architect establishes the overall design and is often responsible for the detailed design of the fabric of a hotel. Architects are concerned with both the functional and aesthetic issues of building design. Typically, architects are appointed as lead consultants and will contribute to the project brief.

Area per room
A useful guide to ensure the efficient use of space within the hotel. This is defined as the gross floor area of the whole building divided by the number of bedrooms.

ARR Accounting rate of return. The percentage rate of return earned by a capital investment project.

Asset
Can represent a building or item of mechanical or electrical plant.

Asset management
The process by which a property with money value is effectively controlled and managed as a business.

AssumptionsFinancial reporting is based on several underlying concepts, including assumptions, principles and constraints that have a significant impact on accounting. Accounting assumptions include accrual basis, going concern, entity, monetary unit, and periodicity.

Audit
An examination and verification of an entity’s financial and accounting records and supporting documents by an independent professional accountant called auditor. The examination also includes a study of the reliability of internal controls.

Audit’s reportA report issued by an independent external auditor, containing the results of the audit. This is a written opinion of an independent professional accountant that an entity’s financial statements give a true and fair view of the financial position, results of operation, cash flows in accordance with respective standards. The auditor’s report is required for each corporation whose share is publicity traded. This report is a separate section of the entity’s annual report. An auditor’s report included in the annual report normally takes one of the forms approved by the accountancy professional organizations to cover all requirements imposed by law on the auditor.

AverageMeasure of general tendency during the period or approximating the statistical norm.

Average inventoryIn order to make comparisons, for simplicity it is sometimes calculated by adding the cost of opening inventory and the cost of closing inventory and dividing by two.

Average unit costs
Total cost of production divided by the number of units produced, also called unit cost.